| Notes forming part of accounts [line items] | | |
| Disclosure of notes and other explanatory information [text block] | | |
| Disclosure of general information about reporting entity [abstract] | | |
| Disclosure of general information about reporting entity [text block] | 1. GENERALThe Company for Cooperative Insurance (the “Company”) is a Saudi joint stock Company established in Riyadh, Kingdom of Saudi Arabia by Royal Decree Number M/5 and incorporated on January 18, 1986 corresponding to Jumada Al-Awal 8, 1406H under Commercial Registration No. 1010061695. The Company’s head office is located on Thumamah Road (At Takhassusi) ArRabi District, P.O. Box 86959, Riyadh 11632, Kingdom of Saudi Arabia.The purpose of the Company is to transact cooperative insurance operations and all related activities including reinsurance and agency activities. Its principal lines of business include medical, motor, marine, fire, engineering, energy, aviation, takaful and property and casualty insurance.On July 31, 2003 corresponding to Jumada Thani 2, 1424H the Law on the Supervision of Cooperative Insurance Companies (“Insurance Law”) was promulgated by Royal Decree Number (M/32). On December 1, 2004 corresponding to Shawwal 18, 1425H, the Saudi Central Bank (formerly Saudi Arabian Monetary Authority) “SAMA” as the principal authority responsible for the application and administration of the Insurance Law and its implementing regulations, granted the Company a license to transact insurance activities in Saudi Arabia.The Company conducts the business and advances funds to the insurance operations as required. On January 20, 2004 the Company amended its Articles of Association giving authority to the Board of Directors to determine the disposition of the surplus from insurance operations.On March 20, 2004, the Board of Directors approved the distribution of the surplus from insurance operations in accordance with the Implementing Regulations issued by SAMA, whereby the shareholders of the Company are to receive 90% of the annual surplus from insurance operations and the policyholders are to receive the remaining 10%. Any deficit arising on insurance operations is transferred to the shareholders’ operations in full.The Company has the following subsidiary and associates. Name of the Subsidiary / Associate Registration No. Registration date Ownership interest Financial year end Principal Activities Subsidiary Teejan Al- Khaleej 1010644057 21 July 2020 100% December 31 Developing technology based solutions and extending consultancy services for the insurance and healthcare businesses. The company has commenced its commercial operations in August 2020. The first financial statements of the company will be prepared for the year ending 31 December 2021.Associates United Insurance Company B.S.C. 17337-1 12 May 1986 50% December 31 Insurance for all motor vehicles which travel through the King Fahad Causeway in accordance with the Bahrain Insurance Company Law. Waseel Application Service Provider Limited 1010186558 15 April 2003 45% December 31 Internet based connectivity, information services, and B2B e-commerce capabilities for the healthcare insurance market.These interim condensed consolidated financial statements comprise the Company and its subsidiary (together referred to as the ‘Group’). | 1 |
| Disclosure of statement of compliance [text block] | 2. BASIS OF PREPARATION(a) Statement of complianceThe interim condensed consolidated financial statements of the Group as at and for the period ended March 31, 2021 have been prepared in accordance with International Accounting Standard 34 - “Interim Financial Reporting” (“IAS 34”) as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants (formerly Saudi Organization for Chartered and Professional Accountants) (“SOCPA”) and in compliance with Regulations for Companies in the Kingdom of Saudi Arabia and By-Laws of the Company.The Group’s interim condensed consolidated statement of financial position is not presented using a current / non-current classification. However, the following balances would generally be classified as non-current: statutory deposit, accrued income on statutory deposit, property and equipment, intangible assets, investment properties, investments in equity accounted investments, available for sale investments, defined benefits obligation and return payable on statutory deposit. All other financial statement line items would generally be classified as current.The Company presents its consolidated statement of financial position in order of liquidity. As required by the Saudi Arabian Insurance Regulations, the Company maintains separate books of accounts for Insurance Operations and Shareholders’ Operations and presents the interim condensed consolidated financial statements accordingly (Note 20). Assets, liabilities, revenues and expenses clearly attributable to either activities are recorded in the respective accounts. The basis of allocation of expenses from joint operations is determined and approved by the management and the Board of Directors.The interim condensed consolidated statement of financial position, interim condensed consolidated statement of income, interim condensed consolidated statement of comprehensive income and interim condensed consolidated statement of cash flows of the insurance operations and shareholders operations which are presented in Note 20 of the financial statements have been provided as supplementary financial information to comply with the requirements of the guidelines issued by SAMA implementing regulations and is not required under IFRSs. SAMA implementing regulations requires the clear segregation of the assets, liabilities, income and expenses of the insurance operations and the shareholders operations. Accordingly, the interim condensed consolidated statements of financial position, interim condensed consolidated statements of income, interim condensed consolidated statement of comprehensive income and interim condensed consolidated statement of cash flows prepared for the insurance operations and shareholders operations as referred to above, reflect only the assets, liabilities, income, expenses and comprehensive income or losses of the respective operations.In preparing the Group-level interim condensed consolidated financial statements in compliance with IFRS, the balances and transactions of the insurance operations are amalgamated and combined with those of the shareholders’ operations. Inter-operation balances, transactions and unrealised gains or losses, if any, are eliminated in full during amalgamation. The accounting policies adopted for the insurance operations and shareholders operations are uniform for like transactions and events in similar circumstances.The interim condensed consolidated financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the annual consolidated financial statements as of and for the year ended December 31, 2020. These interim condensed consolidated financial statements are expressed in Saudi Arabian Riyals (SAR), which is also the functional currency of the Group. All financial information presented in Saudi Arabian Riyal has been rounded to the nearest thousands, except where otherwise indicated.The interim condensed consolidated financial statements are prepared under the historical cost convention, except for the measurement at fair value of available-for-sale investments, investment in equity accounted investments which is accounted for under the equity method and defined benefits obligation based on actuarial valuation techniques. | 2 (a) |
| Disclosure of issued IFRS not yet adopted [text block] | 2. BASIS OF PREPARATION d) Standards issued but not yet effectiveThe Company has chosen not to early adopt the following new standards which have been issued but not yet effective for the Company's accounting year beginning on January 1, 2021 and is currently assessing their impact:IFRS 17 – Insurance ContractsOverviewThis standard has been published in May 2017. It establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 – Insurance contracts.The new standard applies to insurance contracts issued, to all reinsurance contracts and to investment contracts with discretionary participating features provided the entity also issues insurance contracts. It requires us to separate the following components from insurance contracts:i) embedded derivatives, if they meet certain specified criteria;ii) distinct investment components; andiii) any promise to transfer distinct goods or non-insurance services.These components should be accounted for separately in accordance with the related standards (IFRS 9 and IFRS 15). MeasurementIn contrast to the requirements in IFRS 4, which permitted insurers to continue to use the accounting policies for measurement purposes that existed prior to January 2005, IFRS 17 provides the following different measurement models:The General Measurement Model (GMM) is based on the following “building blocks”:a) the fulfilment cash flows (FCF), which comprise: probability-weighted estimates of future cash flows; an adjustment to reflect the time value of money (i.e. discounting) and the financial risks associated with those future cash flows; and a risk adjustment for non-financial risk.Contractual Service Margin (CSM):The CSM represents the unearned profit for a group of insurance contracts and will be recognised as the entity provides services in the future. The CSM cannot be negative at inception; any net negative amount of the fulfilment cash flows at inception will be recorded in statement of income immediately. At the end of each subsequent reporting period the carrying amount of a group of insurance contracts is remeasured to be the sum of: the liability for remaining coverage, which comprises the FCF related to future services and the CSM of the group at that date; and the liability for incurred claims, which is measured as the FCF related to past services allocated to the group at that date.The CSM is adjusted subsequently for changes in cash flows related to future services. Since the CSM cannot be negative, changes in future cash flows that are greater than the remaining CSM are recognised in statement of income.The effect of changes in discount rates will be reported in either statement of income or statement of comprehensive income, determined by an accounting policy choice.The Variable Fee Approach (VFA) is a mandatory model for measuring contracts with direct participation features (also referred to as ‘direct participating contracts’). This assessment of whether the contract meets these criteria is made at inception of the contract and not reassessed subsequently. For these contracts, in addition to the adjustment under GMM, the CSM is also adjusted for:i. the entity’s share of the changes in the fair value of underlying items; andii. the effect of changes in the time value of money and in financial risks not relating to the underlying items.In addition, a simplified Premium Allocation Approach (PAA) is permitted for the measurement of the liability for remaining coverage if it provides a measurement that is not materially different from the General Measurement Model or if the coverage period for each contract in the group is one year or less. With the PAA, the liability for remaining coverage corresponds to premiums received at initial recognition less insurance acquisition cash flows. The General Measurement Model remains applicable for the measurement of the liability for incurred claims. However, the entity is not required to adjust future cash flows for the time value of money and the effect of financial risk if those cash flows are expected to be paid/received in one year or less from the date the claims are incurred.Effective dateThe effective date of IFRS 17 is currently 1 January 2023 and will supersede IFRS 4 “Insurance Contracts”. Earlier adoption is permitted if both IFRS 15 “Revenue from Contracts with Customers” and IFRS 9 “Financial Instruments” have also been applied. The Company expects a material impact on measurement and disclosure of insurance and reinsurance that will affect both the consolidated statement of income and the consolidated statement of financial position. The Company has decided not to early adopt this new standard.TransitionRetrospective application is required. However, if full retrospective application for a group of insurance contracts is impractical, then the entity is required to choose either a modified retrospective approach or a fair value approach.Presentation and DisclosuresThe Company expects that the new standard will result in a change to the accounting policies for insurance contracts together with amendments to presentation and disclosures. ImpactThe Company has performed an operational gap assessment which has focused on the impact of IFRS 17 across data, systems, processes and people. The Company is currently assessing the impact of the application and implementation of IFRS 17 and in the process of applying. As of the date of the publication of these interim condensed consolidated financial statements, the financial impact of adopting the standard has yet to be fully assessed by the Company. The key areas identified to date are as follows: Impact Area Summary of ImpactFinancial Impact Based on the initial assessment, the majority of Company’s products (which provide cover for annual periods or less) are expected to be measured using the simplified approach (PAA) which requires less changes to the existing approach under IFRS 4. As a result, the financial impact of measuring contracts under IFRS 17 is not expected to be significant. Data Impact Where the GMM is applied to measure the Liability for Remaining Coverage, additional data to inform the assumptions made will be required to generate cash-flow models. Yield curves and other financial market information will also be required to determine suitable discount rates and the credit risk of reinsurers.IT Systems Cash-flow models will be required to cater for the calculation of the Liability for Remaining Coverage. In addition, model development will be required to allow for the calculation, updating and amortisation of the Contractual Service Margin.Amendments will also be required to the current chart of accounts and reporting disclosures. Process Impact A process will need to be established to assess the expected profitability of contracts issued, at the issuing date.Cost allocation processes will need refinement to ensure directly attributable costs are identified according to the requirements of IFRS 17 and are then used as part of cash flow projections.The financial statement close process will also require changes to allow for more frequent interaction between the finance and actuarial teams. Impact on RI Arrangements IFRS 17 is not expected to significantly impact the structure of the reinsurance arrangements currently in place for Tawuniya. It is however expected that further insight into the expected (and subsequently actual) performance of reinsurance treaties will be derived under IFRS 17. Impact on Policies & Control Frameworks Various decisions need to be made and policies drafted which cover the below (amongst other items): Allocating directly attributable expenses Onerous contract identification and measurement Risk adjustmentThe Company is currently assessing the impact of the application and implementation of IFRS 17. As of the date of the publication of these financial statements, the Company has submitted Phase 3 Implementation plan to SAMA.IFRS 9 - “Financial instruments”This standard was published on July 24, 2014 and has replaced IAS 39. The new standard addresses the following items related to financial instruments:i) Classification and measurement:IFRS 9 uses a single approach to determine whether a financial asset is measured at amortised cost, at fair value through other comprehensive income or at fair value through profit or loss. A financial asset is measured at amortised cost if both: the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).The financial asset is measured at fair value through other comprehensive income and realized gains or losses are recycled through profit or loss upon sale, if both conditions are met: the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and for sale; and the contractual terms of cash flows are SPPI,Assets not meeting either of these categories are measured at fair value through profit or loss. Additionally, at initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses), dividends being recognised in profit or loss.Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss.ii) Impairment:The impairment model under IFRS 9 reflects expected credit losses, as opposed to incurred credit losses under IAS 39. Under the IFRS 9 approach, it is no longer necessary for a credit event to have occurred before credit losses are recognised. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition.iii) Hedge accounting:IFRS 9 introduces new requirements for hedge accounting that align hedge accounting more closely with Risk Management. The requirements establish a more principles-based approach to the general hedge accounting model. The amendments apply to all hedge accounting with the exception of portfolio fair value hedges of interest rate risk (commonly referred to as “fair value macro hedges”). For these, an entity may continue to apply the hedge accounting requirements currently in IAS 39. This exception was granted largely because the IASB is addressing macro hedge accounting as a separate project.iv) Effective dateThe published effective date of IFRS 9 was 1 January 2018. However, amendments to IFRS 4 – Insurance Contracts: Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts, published on 12 September 2016, changes the existing IFRS 4 to allow entities issuing insurance contracts within the scope of IFRS 4 to mitigate certain effects of applying IFRS 9 before the IASB’s new insurance contract standard (IFRS 17 – Insurance Contracts) becomes effective. The amendments introduce two alternative options:- Apply a temporary exemption from implementing IFRS 9 until the earlier of: the effective date of a new insurance contract standard; or annual reporting periods beginning on or after January 1, 2023. On March 17, 2020, the International Accounting Standards Board (“IASB”) decided to extend the effective date of IFRS 17 and the IFRS 9 temporary exemption in IFRS 4 from January 1, 2021 to January 1, 2023. Additional disclosures related to financial assets are required during the deferral period. This option is only available to entities whose activities are predominately connected with insurance and have not applied IFRS 9 previously; or- Adopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required.The Company has performed a detailed assessment beginning January 1, 2018: (1) The carrying amount of the Company’s liabilities arising from contracts within the scope of IFRS 4 (including deposit components or embedded derivatives unbundled from insurance contracts) were compared to the total carrying amount of all its liabilities; and (2) the total carrying amount of the company’s liabilities connected with insurance were compared to the total carrying amount of all its liabilities. The Company’s total liabilities were SAR 10,543 million and liabilities connected with insurance in the statement of financial position primarily included the liabilities arising in the course of writing insurance business and were valued at SAR 9,723 million. Based on these assessments the Company determined that it is eligible for the temporary exemption. Consequently, the Company has decided to defer the implementation of IFRS 9 until the effective date of the new insurance contracts standard. Disclosures related to financial assets required during the deferral period are included in the Company’s interim condensed consolidated financial statements.(v) Impact assessmentAs at March 31, 2021, the Company held financial assets at amortized cost consisting of cash and cash equivalents and certain other receivables amounting to SAR 3,948 million (2020: SAR 3,711 million). The Company held available for sale investments amounting to SAR 2,957 million (2020: SAR 3,018 million). The Company expect to use the FVOCI classification for financial assets based on the business model of the Company for debt securities and strategic nature of equity investments. However, the Company is yet to perform a detailed assessment to determine whether the debt securities meet the SPPI test as required by IFRS 9. Investment in funds and discretionary portfolio management – equity shares classified under available for sale investments amounting to SAR 1,275 million (2020: SAR 1,413 million) will be at FVSI under IFRS 9. As at March 31, 2021, debt securities are measured at fair value of SAR 1,536 million (2020: SAR 1,596 million). The Company financial assets have low credit risk as at March 31, 2021 and December 31, 2020. The above is based on high-level impact assessment of IFRS 9. This preliminary assessment is based on currently available information and may be subject to changes arising from further detailed analyses or additional reasonable and supportable information being made available to the Company in the future. Overall, the Company expects some effect of applying the impairment requirements of IFRS 9. However, the impact of the same is not expected to be significant. At present it is not possible to provide reasonable estimate of the effects of application of this new standard as the Company is yet to perform a detailed review. | 2 (d) |
| Disclosure of critical accounting judgements, estimates and assumptions, general [text block] | 2. BASIS OF PREPARATION(b) Critical accounting judgments, estimates and assumptionsThe preparation of the interim condensed consolidated financial statements requires the use of estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates and judgments are based on management’s best knowledge of current events and actions, actual results ultimately may differ from those estimates. Estimates and judgments are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.In preparing these interim condensed consolidated financial statements, the significant judgments made by the management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as of and for the year ended December 31, 2020.Following are the accounting judgments and estimates that are critical in preparation of these interim condensed consolidated financial statements:i) The ultimate liability arising from claims made under insurance contractsThe estimation of the ultimate liability arising from claims made under insurance contracts is the Company’s most critical accounting estimate given the level of subjectivity inherent in estimating the impact of claim events that have occurred and incurred but not reported for which the ultimate outcome remains uncertain. There are several sources of uncertainty that need to be considered in the estimate of the liability that the Company will ultimately pay for such claims. Estimates are made at the end of the reporting period both for the expected ultimate cost of claim reported and for the expected ultimate costs of claims incurred but not reported (“IBNR”). Liabilities for unpaid reported claims are estimated using the input of assessments for individual cases reported to the Company. At the end of each reporting period, prior year claims estimates are reassessed for adequacy and changes are made to the provision.The provision for claims incurred but not reported (IBNR) is an estimation of claims which are expected to be reported subsequent to the date of statement of financial position, for which the insured event has occurred prior to the date of statement of financial position. The primary technique adopted by management in estimating the cost of notified and IBNR claims, is that of using the past claims settlement trends to predict future claims settlement trends.The Company has appointed a qualified actuary who supports in reviewing and providing recommendation with regards to the expected ultimate claims and the associated claims reserves. The Company booked reserves following the recommendation of the appointed actuary who is currently external and independent from the Company. A range of methods were used by the appointed actuary to determine these claims. A range of methods such as Chain Ladder Method, Bornhuetter-Ferguson Method and Expected Loss Ratio Method are used by the actuaries to determine these provisions. Actuary had also used a segmentation approach including analysing cost per member per year for medical line of business. Underlying these methods are a number of explicit or implicit assumptions relating to the expected settlement amount and settlement patterns of claims.Estimation of premium deficiency is highly sensitive to a number of assumptions as to the future events and conditions. It is based on an expected loss ratio for the unexpired portion of the risks for written policies. To arrive at the estimate of the expected loss ratio, the company’s external, consider the claims and premiums relationship which is expected to apply on unearned portion of the written risks, and ascertain, at the end of the financial period, whether a premium deficiency reserve is required.ii) Impairment of available-for-sale financial assetsThe Company determines that available-for-sale financial assets are impaired when there has been a significant or prolonged decline in the fair value of the available-for-sale financial assets below its cost. The determination of what is significant or prolonged requires judgment. For equity and mutual funds, a period of 12 months or longer is considered to be prolonged and a decline of 30% from original cost is considered significant as per Company policy. In making this judgment, the Company also evaluates among other factors, the normal volatility in share price, the financial health of the investee, industry and sector performance, changes in technology, and operational and financing cash flows. The Company reviews its debt securities classified as available-for-sale at each reporting date to assess whether they are impaired.iii) Impairment of receivablesA provision for impairment of receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired.iv) Fair value of financial instrumentsFair values of available-for-sale investments are based on quoted prices for marketable securities or estimated fair values. The fair value of commission-bearing items is estimated based on discounted cash flows using commission for items with similar terms and risk characteristics.The fair value of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. In these cases, the fair values are estimated from observable data in respect of similar financial instruments or using models. Where market observable inputs are not available, they are estimated based on appropriate assumptions. Where valuation techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed. All models are calibrated to ensure that outputs reflect actual data and comparative market prices. To the extent practical, models use only observable data; however, areas such as credit risk (both own credit risk and counterparty risk), volatilities and correlations require management to make estimates. Refer fair value of financial instruments disclosure in note 16. v) Impact of Covid-19 and Council of Cooperative Heath Insurance (“CCHI”) on technical reserves On March 11, 2020, the World Health Organization (“WHO”) declared the Coronavirus (“Covid-19”) outbreak as a pandemic in recognition of its rapid spread across the globe. This outbreak had also affected the GCC region including the Kingdom of Saudi Arabia. Governments all over the world took steps to contain the spread of the virus. Saudi Arabia in particular had implemented closure of borders, released social distancing guidelines and enforced country wide lockdowns and curfews. In response to the spread of the Covid-19 virus in the Kingdom of Saudi Arabia including the GCC region, where the Company operates and its consequential disruption to the social and economic activities in those markets, the Company’s management had proactively assessed its impacts on its operations and had taken a series of proactive and preventative measures and processes to ensure:- the health and safety of its employees and the wider community where it is operating- the continuity of its business throughout the Kingdom is protected and kept intact. The major impact of Covid-19 pandemic is seen in medical and motor line of business as explained below. As with any estimate, the projections and likelihoods of occurrence are underpinned by significant judgment and rapidly evolving situation and uncertainties surrounding the duration and severity of the pandemic, and therefore, the actual outcomes may be different to those projected. The impact of such uncertain economic environment is judgmental, and the Company will continue to reassess its position and the related impact on a regular basis.Medical technical reservesBased on the management’s assessment, the management believes that the Government’s decision to assume the medical treatment costs for both Saudi citizens and expatriates has helped in reducing any unfavorable impact. During the lockdown, the Company saw a decline in medical reported claims (majorly elective and non-chronic treatment claims) which resulted in a drop in claims experience. However, subsequent to the lifting of lockdown since June 21, 2020, the Company is experiencing an increase in claims which is in line with the expectations of the Company’s management regarding delayed treatment.CCHI issued a Circular 895, dated December 17, 2020 regarding the procedures, protocols and prices relating to the enforcement of Article 11. Following these procedures, government facilities will be now able to bill insurance companies for the claims incurred for some elements of their insured population. As instructed by the CCHI, the new protocols and procedures will cover all new and renewing policies incepting from January 1, 2021. Moreover, this will also cover all emergency cases for all inforce policies as of January 1, 2021.Motor technical reservesIn response to the Covid-19 pandemic, SAMA issued a circular 189 (the “circular”) dated May 8, 2020 to all insurance companies in the Kingdom of Saudi Arabia. Amongst other things, the circular instructed insurance companies to extend the period of validity of all existing retail motor insurance policies by a further two months as well as providing a two-month additional coverage for all new retail motor policies written within one month of this circular.The Management, in conjunction with its appointed actuary, deliberated on a variety of internal factors and concluded, that the Company considers the extension of two months in exiting motor policies as new policy and record a premium deficiency reserve, if any based on the expected claims for the extended 2 months period. The Company’s actuary has performed a liability adequacy test using current estimates of future cash flows under its insurance contracts at a segmented level for motor line of business and no additional liability recorded as premium deficiency reserve as at March 31, 2021.For new policies written as per above circular, the premium is earned over the period of coverage i.e. 14 months as per the Company’s accounting policy. There is no significant impact of two month extension in earned premium as of March 31, 2021.Other financial assetsTo cater for any potential impacts, the Covid-19 pandemic may have had on the financial assets of the Company, the Company has performed an assessment in accordance with its accounting policy, to determine whether there is an objective evidence that a financial asset or a group of financial assets has been impaired. For debt financial assets, these include factors such as, significant financial difficulties of issuers or debtors, default or delinquency in payments, probability that the issuer or debtor will enter bankruptcy or other financial reorganization, etc. In case of equities classified under available-for-sale, the Company has performed an assessment to determine whether there is a significant or prolonged decline in the fair value of financial assets below their cost.Based on these assessments, the Company’s management believes that the Covid-19 pandemic has had no material effects on Company’s reported results for the three months period ended March 31, 2021. The Company’s management continues to monitor the situation closely. | 2 (b) |
| Disclosure of summary of significant accounting policies [abstract] | | |
| Disclosure of summary of significant accounting policies, general comment [text block] | 2. BASIS OF PREPARATION (c) Significant accounting policiesThe accounting and risk management policies adopted in the preparation of these condensed consolidated interim financial statements are consistent with the Company’s audited consolidated financial statements for the year ended December 31, 2020. | 2 (c) |
| Description of accounting policy for segment reporting [text block] | 2. BASIS OF PREPARATION (e) Segmental reportingA segment is a distinguishable component of the Company that is engaged in providing products or services (a business segment), which is subject to risk and rewards that are different from those of other segments. For management purposes, the Company is organized into business units based on their products and services and has eight reportable segments as follows: Medical - coverage for health insurance. Medical Umrah - coverage for health insurance for pilgrims. Motor insurance - coverage for motor insurance and for Manafeth third party liability insurance for foreign vehicles. Property and Casualty - coverage for property, engineering, marine, aviation, energy and general accidents insurance. General accidents insurance - coverage for pilgrims. Protection & Savings. Teejan Al- Khaleej segment - reporting Teejan Al- Khaleej operations of the Company subsidiary. Income earned from extending consulting services and facilities for insurance and healthcare business. Shareholders’ segment - reporting shareholder operations of the Company. Income earned from investments is the only revenue generating activity. Certain direct operating expenses and other overhead expenses are allocated to this segment on an appropriate basis. The surplus or loss from the insurance operations is allocated to this segment on an appropriate basis.Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief executive officer that makes strategic decisions. No inter-segment transactions occurred during the period. | 2 (e) |
| Description of accounting policy for seasonality of operations [text block] | 2. BASIS OF PREPARATION (f) Seasonality of operationsOther than normal seasonality in Medical Insurance Business in the Kingdom of Saudi Arabia, there are no seasonal changes that may affect insurance operations of the Company. | 2 (f) |
| Disclosure of notes forming part of accounts [abstract] | | |
| Disclosure of reinsurers/ retakaful share of outstanding claims, net [text block] | 8. UNEARNED PREMIUM, OUTSTANDING CLAIMS AND RESERVES, NET(ii) Gross outstanding claims and reserves, net comprise of the following: March 31, December 31, 2021 2020 (Unaudited) (Audited) SAR’000Gross outstanding claims 2,516,702 2,548,105 Less: Realizable value of salvage and subrogation (31,897) (31,453) 2,484,805 2,516,652 Incurred but not reported claims reserve 1,690,740 1,549,350 Premium deficiency reserve 13,010 52,401 Gross outstanding claims and reserves 4,188,555 4,118,403 Reinsurers’ share of gross outstanding claims (1,901,386) (1,962,570)Reinsurers’ share of incurred but not reported claims (301,419) (289,784)Reinsurers’ share of outstanding claims and reserves (2,202,805) (2,252,354) Net outstanding claims and reserves 1,985,750 1,866,049 There are several sources of uncertainty that need to be considered in the estimate of the liability that the Company will ultimately pay for such claims. The management and its appointed actuary have made a detailed assessment of technical reserves and the various parameters in the valuation of technical liabilities. As at March 31, 2021, based on the recommendations of its appointed actuary, management has recorded technical reserves (Gross outstanding claims and reserves including premium deficiency reserves) amounting to SAR 4.2 billion (December 31, 2020: SAR 4.1 billion). Significant portion of these reserves relate to medical and property and casualty line of business which are a best-estimate of the expected ultimate claim trends as at March 31, 2021. | 8 (ii) |
| Disclosure of reinsurers/ retakaful share of unearned premium/ contributions, net [text block] | 8. UNEARNED PREMIUM, OUTSTANDING CLAIMS AND RESERVES, NET(i) The movement in unearned premiums is as follows: March 31, 2021 December 31, 2020 (Unaudited) (Audited) Gross Reinsurers’ share Net Gross Reinsurers’ share Net SAR’000Balance as at the beginning of the period / year 4,319,378 (683,698) 3,635,680 3,826,119 (715,959) 3,110,160 Premiums written during the period / year 2,920,720 (329,055) 2,591,665 9,061,768 (1,478,346) 7,583,422 Premiums earned during the period / year (2,182,062) 344,544 (1,837,518) (8,568,509) 1,510,607 (7,057,902)Balance as at the end of the period / year 5,058,036 (668,209) 4,389,827 4,319,378 (683,698) 3,635,680 | 8 (i) |
| Disclosure of investments held-to-maturity [text block] | 5. MUDARABA/ MURABAHA DEPOSITSThe deposits are held with banks and financial institution registered with Capital Market Authority in the Kingdom of Saudi Arabia. These deposits are predominately in mudaraba structures. These deposits are denominated in SAR and have an original maturity of more than three months. The average yield on these deposits is 1.57% per annum (December 31, 2020: 1.51% per annum). The movements in deposits during the period / year is as follows: March 31, 2021(Unaudited) December 31,2020(Audited) SAR’000Insurance Operations Balance at the beginning of the period / year 1,291,465 1,577,912 Placed during the period / year 280,736 4,687,222 Matured during the period / year (336,481) (4,973,669) Balance at the end of the period / year 1,235,720 1,291,465 Shareholders’ Operations Balance at the beginning of the period / year 1,843,467 1,961,464 Placed during the period / year 296,500 5,605,750 Matured during the period / year (169,515) (5,723,747)Balance at the end of the period / year 1,970,452 1,843,467 Total 3,206,172 3,134,932 | 5 |
| Disclosure of investments in available-for-sale investments [text block] | 4. AVAILABLE-FOR-SALE INVESTMENTS Available-for-sale investments comprise the following: March 31, 2021(Unaudited) December 31,2020(Audited) SAR’000Insurance Operations Mutual funds 105,809 263,364 Fixed income investments 1,380,788 1,478,376 Discretionary portfolio management – equity shares 277,214 176,967 Private equity investment 10,250 10,250 Funds with portfolio manager 70,930 89,707 Total 1,844,991 2,018,664 Shareholders’ Operations Mutual funds 787,868 627,028 Fixed income investments 156,113 167,022 Discretionary portfolio management – equity shares 104,443 111,141 Private equity investment - 53,145 Funds with portfolio manager 64,052 41,566 Total 1,112,476 999,902 Total available-for-sale investments 2,957,467 3,018,566Movements in available-for-sale investments are as follows: March 31, 2021(Unaudited) December 31, 2020(Audited) Quoted securities Unquoted securities Total Quoted securities Unquoted securities Total SAR’000Insurance Operations Balance at the beginning of the period/ Year 245,565 1,773,099 2,018,664 162,837 1,348,687 1,511,524 Purchases 48,019 70,243 118,262 472,665 1,304,457 1,777,122 Reclassification from investment in equity accounted investments - - - - 10,250 10,250 Disposals - (319,250) (319,250) (447,393) (763,828) (1,211,221)Changes in fair value of investments 36,928 (9,613) 27,315 57,456 (126,467) (69,011)Balance as at the end of the period/ year 330,512 1,514,479 1,844,991 245,565 1,773,099 2,018,664 Shareholders’ Operations Balance at the beginning of the period/ Year 55,972 943,930 999,902 194,980 1,040,244 1,235,224 Purchases 937 343,357 344,294 - 693,086 693,086 Disposals - (246,922) (246,922) (132,207) (837,328) (969,535)Changes in fair value of investments 6,612 8,590 15,202 (6,801) 47,928 41,127 Balance as at the end of the period/ year 63,521 1,048,955 1,112,476 55,972 943,930 999,902 Total 394,033 2,563,434 2,957,467 301,537 2,717,029 3,018,566As at March 31, 2021 the Company has invested in Shariah Notes having fair value amounting to SAR 2.9 billion (December 31, 2020: SAR 2.8 billion). The Shariah Notes are issued by a special purpose vehicle “SPV” established in Cayman Islands. The administrator of these Shariah Notes is a Company registered in Dubai International Financial Center in Dubai. The underlying investments of Shariah Notes include funds, discretionary portfolio management – equity shares and fixed income portfolios. The legal ownership of these underlying investments is not with the Company, however, the Company is the ultimate beneficial owner of the underlying investments while having control over the Shariah Notes and underlying investments. The custody of the underlying investments is in the custody account of the SPV or its nominee entity opened with fund and portfolio managers.The movement of changes in fair value of investments is as follows: Three months ended March 31, 2021 (Unaudited) Three months ended March 31, 2020(Unaudited) SAR’000Insurance Operations Change in fair value 27,315 4,578Net amount recycled to interim condensed consolidated statement of income (5,567) -Impairment on available-for-sale investments - 2,637 21,748 7,215Shareholders’ Operations Change in fair value 15,202 (15,296)Net amount recycled to interim condensed consolidated statement of income (30,446) (18,216)Impairment on available-for-sale investments - 2,175 (15,244) (31,337) Total 6,504 (24,122) | 4 |
| Disclosure of premiums/ contributions and insurance/ reinsurance or takaful/ retakaful balance receivables [text block] | 3. RECEIVABLES, NET Receivables comprise net amounts due from the following: March 31, 2021(Unaudited) December 31,2020(Audited) SAR’000Policyholders 3,189,319 1,978,212Brokers and agents 557,522 1,443,859 Related parties (note 15) 246,434 135,786 3,993,275 3,557,857Receivables from reinsurers 59,171 120,281 Administrative service plan 3,256 3,256 4,055,702 3,681,394Provision for doubtful receivables (200,189) (200,841)Receivables, net 3,855,513 3,480,553 | 3 |
| Disclosure of prepayments and other assets [text block] | 6. PREPAID EXPENSES AND OTHER ASSETS March 31, 2021(Unaudited) December 31,2020(Audited) SAR’000 Advance to medical service providers and others 362,734 270,329Prepaid expenses 53,064 39,983 Other assets 306,583 306,583 722,381 616,895Other assets represent payment made by the Company in relation to VAT assessment raised by General Authority of Zakat and Tax ("GAZT'') for 2018 and 2019 financial years amounting to SAR 306.58 million. The payments were made to GAZT to avoid penalties along with objection filed against the assessment. GAZT has rejected the objection and the Company has submitted appeal with General Secretariat of Tax Committees (“GSTC”) in accordance with the provisions of the law. The Company's management strongly believes that there is a reasonable basis such that the assessment raised at GSTC will be in the Company’s favour. | 6 |
| Disclosure of cash and cash equivalents [text block] | 7. CASH AND CASH EQUIVALENTS March 31, 2021(Unaudited) December 31,2020(Audited) SAR’000Insurance Operations Bank balances and cash 422,513 337,359 422,513 337,359 Shareholders’ Operations Bank balances and cash 150,277 108,435 150,277 108,435 Total cash and cash equivalents 572,790 445,794Bank balances and cash include call account balance of SAR 131 million (December 31, 2020: SAR 89 million). Bank balances (including off-balance sheet exposures) are placed with counterparties with sound credit ratings under Standard and Poor's and Moody’s ratings methodology. | 7 |
| Disclosure of statutory deposit [text block] | 12. STATUTORY DEPOSITIn compliance with Article 58 of the Insurance Implementing Regulations of SAMA, the Company has deposited 10 percent of its share capital, amounting to SAR 125 million (December 31, 2019: SAR 125 million). The statutory deposit is maintained with the National Commercial Bank and can be withdrawn only with the consent of SAMA. | 12 |
| Disclosure of gross unearned premiums/ contributions [text block] | 8. UNEARNED PREMIUM, OUTSTANDING CLAIMS AND RESERVES, NET(i) The movement in unearned premiums is as follows: March 31, 2021 December 31, 2020 (Unaudited) (Audited) Gross Reinsurers’ share Net Gross Reinsurers’ share Net SAR’000Balance as at the beginning of the period / year 4,319,378 (683,698) 3,635,680 3,826,119 (715,959) 3,110,160 Premiums written during the period / year 2,920,720 (329,055) 2,591,665 9,061,768 (1,478,346) 7,583,422 Premiums earned during the period / year (2,182,062) 344,544 (1,837,518) (8,568,509) 1,510,607 (7,057,902)Balance as at the end of the period / year 5,058,036 (668,209) 4,389,827 4,319,378 (683,698) 3,635,680 | 8 (i) |
| Disclosure of gross outstanding claims/ benefits [text block] | 8. UNEARNED PREMIUM, OUTSTANDING CLAIMS AND RESERVES, NET(ii) Gross outstanding claims and reserves, net comprise of the following: March 31, December 31, 2021 2020 (Unaudited) (Audited) SAR’000Gross outstanding claims 2,516,702 2,548,105 Less: Realizable value of salvage and subrogation (31,897) (31,453) 2,484,805 2,516,652 Incurred but not reported claims reserve 1,690,740 1,549,350 Premium deficiency reserve 13,010 52,401 Gross outstanding claims and reserves 4,188,555 4,118,403 Reinsurers’ share of gross outstanding claims (1,901,386) (1,962,570)Reinsurers’ share of incurred but not reported claims (301,419) (289,784)Reinsurers’ share of outstanding claims and reserves (2,202,805) (2,252,354) Net outstanding claims and reserves 1,985,750 1,866,049 There are several sources of uncertainty that need to be considered in the estimate of the liability that the Company will ultimately pay for such claims. The management and its appointed actuary have made a detailed assessment of technical reserves and the various parameters in the valuation of technical liabilities. As at March 31, 2021, based on the recommendations of its appointed actuary, management has recorded technical reserves (Gross outstanding claims and reserves including premium deficiency reserves) amounting to SAR 4.2 billion (December 31, 2020: SAR 4.1 billion). Significant portion of these reserves relate to medical and property and casualty line of business which are a best-estimate of the expected ultimate claim trends as at March 31, 2021. | 8 (ii) |
| Disclosure of zakat [text block] | 18. ZAKAT Status of assessmentsThe Company had filed Zakat returns with the General Authority of Zakat and Tax (“GAZT”) for the years from 2014 to 2019. The GAZT issued assessments for 2014 to 2018 years, an objection was lodged subsequently. For 2014, GAZT rejected the objection, the same has been appealed again with the higher committee being GSTC and a hearing date is awaited. No further progress has been made following the objection filing with GAZT for 2015 to 2018 years. Furthermore, GAZT has yet to commence its review and assessments for the year 2019. Management believes that appropriate and adequate provisions have been created and that the finalization of the above mentioned assessments is not expected to have a material impact on the interim condensed consolidated financial statements for the period ended March 31, 2021. | 18 |
| Disclosure of classes of share capital [text block] | 9. SHARE CAPITALThe authorized, issued and paid up capital of the Company is SAR 1.25 billion as at March 31, 2021 (December 31, 2020: SAR 1.25 billion) consisting of 125 million shares (December 31, 2020: 125 million shares) of SAR 10 each. Shareholding structure of the Company is as below. The shareholders of the Company are subject to zakat. March 31, 2021 Authorized and issued Paid up No. of Shares SAR’000Held by the public 79,025,509 790,255 790,255 Public Pension Agency 23,612,685 236,127 236,127 General Organization for Social Insurance 22,361,806 223,618 223,618 125,000,000 1,250,000 1,250,000 December 31, 2020 Authorized and issued Paid up No. of Shares SAR’000Held by the public 79,025,509 790,255 790,255Public Pension Agency 23,612,685 236,127 236,127General Organization for Social Insurance 22,361,806 223,618 223,618 125,000,000 1,250,000 1,250,000 | 9 |
| Disclosure of statutory reserve [text block] | 13. STATUTORY RESERVEIn accordance with the Articles of Association of the Company and in compliance with Article 70(2)(g) of the Insurance Implementing Regulations issued by SAMA, the Company is required to allocate 20% of its net income for the year to the statutory reserve until it equals the value of share capital. This transfer is only made at the year end. The statutory reserve is not available for distribution to the shareholders until the liquidation of the Company. | 13 |
| Disclosure of fair value reserve on investments [text block] | 16. FAIR VALUES OF FINANCIAL INSTRUMENTSFair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or the most advantageous) market between market participants at the measurement date under current market conditions regardless of whether that price is directly observable or estimated using another valuation technique. Determination of fair value and fair value hierarchyThe Company uses the following hierarchy for determining and disclosing the fair value of financial instruments: - Level 1: quoted market price: financial instruments with quoted unadjusted prices for identical instruments in active markets. - Level 2: quoted prices in active markets for similar assets and liabilities or other valuation techniques for which all significant inputs are based on observable market data.- Level 3: valuation techniques for which any significant input is not based on observable market data. The following table shows the carrying amount of financial assets and financial liabilities, including their levels in the fair value hierarchy for financial instruments measured at fair value. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation to fair value. SAR’000March 31, 2021 (Unaudited) Level 1 Level 2 Level 3 TotalAvailable-for-sale investments Insurance Operations Mutual funds - 105,809 - 105,809Fixed income investments (Governments and corporations securities) 964,572 416,216 - 1,380,788Discretionary portfolio management – equity shares 277,214 - - 277,214Private equity investment -- 10,250 10,250Funds with portfolio manager 70,930 - - 70,930 1,312,716 522,025 10,250 1,844,991 Shareholders’ Operations Mutual funds - 787,868 - 787,868 Fixed income investments (Governments and corporations securities) - 156,113 - 156,113Discretionary portfolio management – equity shares 104,443 - - 104,443Funds with portfolio manager 64,052 - - 64,052 168,495 943,981 - 1,112,476 Total 1,481,211 1,466,006 10,250 2,957,467 SAR’000December 31, 2020 (Audited) Level 1 Level 2 Level 3 TotalAvailable-for-sale investments Insurance Operations Mutual funds - 263,364 - 263,364Fixed income investments (Governments and corporations securities) 1,032,744 445,632 - 1,478,376Discretionary portfolio management – equity shares 176,967 - - 176,967Private equity investment - - 10,250 10,250Funds with portfolio manager 89,707 - - 89,707 1,299,418 708,996 10,250 2,018,664 Shareholders’ Operations Mutual funds - 627,028 - 627,028Fixed income investments (Governments and corporations securities) 27,217 139,805 - 167,022Discretionary portfolio management – equity shares 111,141 - - 111,141Private equity investment - - 53,145 53,145Funds with portfolio manager 41,566 - - 41,566 179,924 766,833 53,145 999,902 Total 1,479,342 1,475,829 63,395 3,018,566Reconciliation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy: SAR’000 Total gain or loss recognised in March 31, 2021 (Unaudited) Balance January 1 Purchases Disposals Statement of income Other comprehensive income Balance March 31Insurance operations Private equity investment 10,250 - - - - 10,250 10,250 - - - - 10,250Shareholders’ operations Private equity investment 53,145 - (56,252) 3,594 (487) - 53,145 - (56,252) 3,594 (487) - Total 63,395 - (56,252) 3,594 (487) 10,250 SAR’000 Total gain or loss recognised in December 31, 2020 (Audited) Balance January 1 Purchases Disposals Statement of income Other comprehensive income Balance December 31Insurance operations Sukuks 6,341 - (6,341) - - - Private equity investment - 10,250 - - - 10,250 6,341 10,250 (6,341) - - 10,250Shareholders’ operations Private equity investment 53,145 - - - - 53,145 53,145 - - - - 53,145 Total 59,486 10,250 (6,341) - - 63,395 | 16 |
| Disclosure of earnings per share [text block] | 17. EARNINGS PER SHAREBasic and diluted earnings per share for the three months period ended March 31, 2021 and March 31, 2020 have been calculated by dividing the net income for the period attributed to shareholders’ by the weighted average number of ordinary shares issued and outstanding at the end of the period. | 17 |
| Disclosure of related party transactions [text block] | 15. RELATED PARTY TRANSACTIONS AND BALANCESRelated parties represent major shareholders, directors and key management personnel of the Company, and companies of which they are principal owners and any other entities controlled, jointly controlled or significantly influenced by them. Pricing policies and terms of these transactions are approved by the Company’s management and Board of Directors. The following are the details of the major related party transactions during the period and the related balances: Transactions for the period ended Balance receivable / (payable) as at Sep Sep Sep December 30, 2020 30, 2019 30, 2020 31, 2019 (Unaudited) (Unaudited) (Unaudited) (Audited) SAR’000Major shareholders Insurance premium written 58,027 54,047 37,856 3,862General Organization for Social Insurance – Other services 134 82 - - Associates Insurance premium written 745 15,082 313 674Najm fees paid - 9,806 - -Waseel fees paid 2,923 11,613 -United Insurance Co. fees and claims, net 5,794 8,667 7,139 2,663 Entities controlled, jointly controlled or significantly influenced by related parties Insurance premium written 98,928 119,415 43,267 117,747Rent expenses paid 675 223 - 561Amount of claims paid to hospitals - 46,918 - (4,197)In accordance with the Company’s Articles of Association, the Board of Directors is entitled each year to remuneration of up to 10% of the remaining profit from Shareholders’ operations, as defined, based on a decision by the General Assembly.The compensation of key management personnel during the period is as follows: Sep 30, 2020 (Unaudited) Sep 30, 2019 (Unaudited) SAR’000Salaries and other allowances 7,757 7,617End of service indemnities 646 522 | 15 |
| Disclosure of entity's operating segments [text block] | 19. OPERATING SEGMENTSConsistent with the Company’s internal reporting process, operating segments have been approved by the management in respect of the Company’s activities, assets and liabilities. Information disclosed in the note is based on current reporting to the chief operating decision maker.Segment assets do not include insurance operations’ property and equipment, intangible assets, investment properties, available for sale investments, mudaraba / murabaha deposits, prepaid expenses and other assets, receivables, net, accrued investment income and cash and cash equivalents. Accordingly, they are included in unallocated assets. Segment liabilities do not include insurance operations’ surplus distribution payable, defined benefits obligation, claims payable, accrued expenses and other liabilities, short-term borrowings and reinsurers’ balances payable. Accordingly, they are included in unallocated liabilities.These unallocated assets and liabilities (including the related charges for provision for doubtful debts on premiums receivable and depreciation on the property and equipment) are not reported to chief operating decision maker under related segments and are monitored on a centralized basis. | 19 |
| Disclosure of commitments and contingencies, general [text block] | 11. CONTINGENT LIABILITIESAs at March 31, 2021, the Company was contingently liable for letters of guarantees, issued on its behalf by the banks, amounting to SAR 225 million (December 31, 2020: SAR 200 million) occurring in the normal course of business.The Company, in common with others insurers, is subject to litigation in the normal course of its business. Appropriate provisions have been made in relation to pending cases and management believes that finalization of these court cases is not expected to have a material impact on the interim condensed consolidated financial statements. | 11 |
| Disclosure of risk management [abstract] | | |
| Disclosure of insurance/ takaful risk [text block] | 21. RISK MANAGEMENTThe risk management policies used in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual financial statements for the year ended December 31, 2020. | 21 |
| Disclosure of comparative figures [text block] | 22. RECLASSIFICATION OF COMPARATIVE FIGURES Certain of the prior period amounts have been reclassified to conform with the presentation in the current period. These changes were made for better presentation of balances and transactions in the interim condensed consolidated financial statements of the Company.Reclassification from the consolidated statement of income Reclassification to the consolidated statement of income AmountSAR’000Other underwriting expenses Expenses incurred related to claims 54,083 | 22 |
| Disclosure of board of director's approval of the financial statements [text block] | 23. APPROVAL OF THE INTERIM CONDENSED FINANCIAL STATEMENTSThe interim condensed consolidated financial statements have been approved by the Board of Directors, on Ramadan 26, 1442H, corresponding to May 08, 2021. | 23 |
| Disclosure of other notes relevant to understanding of financial statements [text block] | 14. INSURANCE SHARED AGREEMENTS(i) Manafeth shared agreement:On January 13, 2015 the Company, together with 25 other insurance companies, signed the Manafeth shared agreement relating to third party liability motor insurance which is effective from January 1, 2015. The agreement relates to motor insurance for vehicles entering the Kingdom of Saudi Arabia. The agreement was renewed for two years from January 1, 2019 to December 31, 2020 with 25 other insurance companies.The main terms of the agreement are as follows:- The Company obtains 15% management fee of the net result of the Manafeth portfolio;- The Company obtains 4.25% of Manafeth’s gross premiums written to cover the related indirect expenses; and- The net result of the Manafeth portfolio after deducting the two above mentioned items is shared equally by the Company and other insurers.Effective from January 1, 2021, in accordance with a new shared agreement signed together with 3 other insurance companies and Najm Insurance Services “Najm”, Najm would be in charge of managing the Manafeth (Outpost Offices) and will be acting as an agent on behalf of the insurers in the agreement. The purpose of this restructuring is to handle the sale of insurance policies for the foreign vehicles entering or crossing the borders of the Kingdom of Saudi Arabia, on behalf of the participating insurance companies. Najm will be sharing the insurance policies equally with the participating insurance companies and the accounting of premiums and related claims cost will be recorded separately by each of the participating insurance companies in their respective financial statements. (ii) Umrah shared agreement:On January 1, 2020 the Company, together with 28 other insurance companies, signed the Umrah shared agreement relating to medical and general accidents insurance which is effective from January 1, 2020. The agreement relates to insurance of pilgrims who enter the Kingdom of Saudi Arabia.The main terms of the agreement are as follows:- The Company obtains 2% management fee of the net result of the Umrah portfolio;- The Company obtains 2.5% of Umrah’s gross premiums written to cover the related indirect expenses; - The Company obtains 0.3% of investing portfolio funds; - The Company pays 7.5% brokerage commission of Umrah’s gross premiums written through broker;- The Company pays 10% of Umrah’s portfolio surplus to Ministry of Hajj and Umrah; and- The net result of the Umrah portfolio after deducting all the above mentioned items is shared equally by the Company and other insurers.10. SHORT-TERM BORROWINGSThe Company entered into a credit facility on June 28, 2020 of SAR 400 million with Riyadh Bank for SIBOR 3 months + 0.65% for a period of 360 days for its operations. As at March 31, 2021 the Company has utilised SAR 400 million (December 31, 2020: SAR 400 million). | 14, 10 |
